Specialty chemicals company Lanxess AG reported Thursday that its second-quarter net income surged to 803 million euros from last year's 96 million euros.

 

Sales fell 16.7 percent to 1.44 billion euros from 1.72 billion euros a year ago.

 

At the same time, net financial liabilities decreased from EUR 1.74 billion to EUR 929 million. This was attributable to proceeds from the sale of its stake in chemical park operator Currenta, which LANXESS concluded at the end of April. 

 

In the second quarter of 2020, LANXESS recorded a significant impact on its business results from the coronavirus pandemic, as expected. EBITDA pre exceptionals fell by 20.3 percent from EUR 281 million to EUR 224 million. Earnings were thus at the midpoint of the range of between EUR 200 million and EUR 250 million that was forecast in May. 

 

Business with consumer protection products in the Consumer Protection segment developed very positively, but weak demand from the automotive industry squeezed earnings in the other three segments, especially Engineering Materials.

 

“As expected, after the huge slump in the global economy we felt the effects of the coronavirus crisis much more strongly in the second quarter than in the first three months of the year. However, our stable positioning, strong liquidity, and high cost discipline are continuing to get LANXESS through this challenging time well. Besides, we are already seeing initial signs of a recovery in Asia. I therefore remain confident, even though a rapid macroeconomic recovery cannot be foreseen at present,” said Matthias Zachert, Chairman of the Board of Management of LANXESS AG.

 

In the Advanced Intermediates segment, both business units recorded weaker demand as a result of the coronavirus pandemic. Sales fell by 19.8 percent from EUR 585 million to EUR 469 million, also due to lower prices.

 

The coronavirus pandemic also led to a significant decline in sales volumes in the Specialty Additives segment, particularly due to lower demand from the automotive, aviation, and oil and gas industries. Sales fell by 20.4 percent from EUR 506 million to EUR 403 million. 

 

In the Consumer Protection segment, sales and earnings continued to develop positively. This was particularly due to strong business with agrochemicals in the Saltigo business unit. Continued good demand for disinfectants in the Material Protection Products business unit also contributed to the increase in earnings. In addition, there was a positive portfolio effect from the acquisition of the Brazilian biocide manufacturer IPEL. Sales rose by 21.9 percent from EUR 247 million to EUR 301 million. 

 

In the Engineering Materials segment, the coronavirus pandemic had a significant impact, continuing to result in weak demand from the automotive industry. At EUR 244 million, sales were down 33.2 percent on the prior year’s figure of EUR 365 million, also due to lower prices. 

 

The company confirmed its forecast for the full year and still anticipates EBITDA pre exceptionals of between EUR 800 million and EUR 900 million for 2020.